Microsoft aims to sink school software pirates

Software giant Microsoft is stepping up efforts to stop software piracy, and schools that don’t shape up soon might have to pay up.

Microsoft is seeking to thwart would-be software pirates by adding copy controls to the new version of its operating system and by urging schools to invoke zero-tolerance policies against copyright-violating educators.

The company’s latest version of its Windows operating system, Windows XP, contains a technology called “product activation” that creates and stores a profile of the configuration of every PC on which you install the software. This profile allows Microsoft to “lock” each copy of Windows XP to one specific computer.

The technology is intended to thwart licensing infringements of the software, and it’s just the latest in a series of steps Microsoft has taken to crack down on software piracy.

In fact, a number of school districtsmost notably the School District of Philadelphiahave been the target of recent investigations by Microsoft, after company officials received tips that schools were installing single-user copies of Microsoft Office on multiple hard drives.

According to the Philadelphia schools’ chief information officer, Ron Daniels, the district received notice from its Microsoft sales representative earlier this year that someone had reported a December 2000 piracy incident at a school.

The district has no knowledge of the circumstances of this incident, because Microsoft policy is not to reveal the identity of the person that reported the incident, said Daniels.

But on July 10, the online magazine Salon.com printed an interview with a Philadelphia computer teacher, using the pseudonym Lloyd Kowalski, who reportedly admitted to installing his school’s only copy of Office on several teachers’ computers last January.

“It was a minor violation,” the teacher told Salon.com. “We use AppleWorks for word processing, but I put Office on [teachers’] computers because they couldn’t read the Microsoft Word attachments they kept getting from the district’s central office. It was easy to do, and it made sense since our schools are in dire financial straits.”

Dire straits indeed. Last month, the Philadelphia Inquirer reported that unless they received additional cash advances from the state or city government, district officials weren’t sure how much longer they could meet payroll for the district’s 27,000 employees.

In fact, to meet payroll for the week ending June 22, the Philadelphia School District had to delay payments totaling nearly $30 million to several major vendors.

“I don’t know how far into July we can go,” Philip R. Goldsmith, the district’s interim chief executive officer, told the Inquirer shortly after discussing the district’s financial woes with the Board of Education. “None of this is a surprise. We’re not creating a crisis. A crisis is here.”

But arguments like that hold little water with Microsoft or the Business Software Alliance (BSA), an industry-wide enforcement group that educates computer users about software copyrights, advocates public policy that expands trade opportunities, and fights software piracy. Microsoft is a member of BSA, but company officials say they do not have information about whether BSA is involved in the Philadelphia case.

In accordance with standard Microsoft practice, the company sales representative notified the district of the alleged violation and explained that Microsoft would be investigating the call, said Daniels. But according to a Microsoft official, there was no call that sparked the investigation.

Toby Richards, director of marketing for Microsoft’s Education Solutions group, explained that “the topic of compliance came up through the course of our daily customer relationship.”

“It’s my understanding that we were there to talk about the academic licensing, and that led to a question about the district’s current [copyright compliance] situation,” he said. “We wanted to begin educating the school users within the district on compliance. This generated some great conversation about those issues.”

Regardless of where the investigation originated, during the next 90 days there were a series of conference calls and meetings between Microsoft and the Philadelphia School District, culminating in a request from Microsoft that an internal audit be performed.

The audit was to be done in two phases, Daniels explained. Phase One was to audit the software and corresponding licenses for all personal computers within the district. That phase was completed in April.

Phase Two was to audit all of the district’s Macintosh computers, and it is still under way. The complete audit is expected by late summer or early fall.

“We are in the process of determining how compliant we are … and will have this information sometime late this summer, once the second phase is complete,” said Daniels. “I can say that after the first phase was completed, we were over 97-percent compliant with our software on administrative PCs.”

Daniels believes that schools should not be held to the same copyright standards as for-profit businesses, because school districts deal with issues other institutions need not face, such as lack of funds, donated equipment, and stakeholders that are unfamiliar with the rules.

“There are new employees coming into the system, there are principals moving from one school to another, and there are administrative offices that constantly exchange equipment once new purchases are made,” he said. “Given that, it’s real easy to lose track of equipment, let alone software licenses.

“I feel that, just as there are significant software discounts for educational institutions and nonprofit groups, so too should there be some leeway with regards to regulations,” he added.

Microsoft’s Richards said while the company is very proud of its academic pricing and programs, “when we sign a agreement with a customer, we expect that customer to abide by the terms of that agreement, like any two parties would expect when contracts are being signed.”

Daniels said Microsoft has been very supportive of the district’s audit efforts, giving the district an initial 90-day extension on performing the audit, searching company records to provide the district with software licenses, and allowing the district access to Microsoft’s online license database.

But Daniels said organizations in charge of enforcing copyright lawslike BSAhave been going for the most vulnerable targets.

“Given the magnitude of this problem worldwide, I think it’s easy prey to go after large school districts,” he said. “It does not matter how many policies, procedures, and training programs that you have in place, when you have over 40,000 computers with over 30,000 employees and over 200,000 students, there is bound to be something installed on a computer that should not be there.”

Bob Moore, executive director of information technology services for the Blue Valley School District in Overland Park, Kan., agreed that compliance is a problem for schools. “Any large district that can say with absolute confidence that they are 100-percent compliant on all copyright issues has its head in the sand,” he said. “Your compliance issues grow exponentially with the more technology you have and the more people that use the technology.”

Well within its rights

For the most part, educators seem to agree that Microsoft did not exceed its rights in auditing the Philadelphia school district.

Rick Bauer is the chief information officer for the Hill School, a private academy located near Philadelphia. Bauer said he believes schools should be held to the same copyright standards as private businesses.

“The size of the company, the cost of the software, the ease at which it can be copied, are all just smoke-screening the real issuetheft,” he said. “Licensing can get a little tricky, but the plain fact of the matter is that unauthorized copying of other people’s work is stealing.

“If any of the teachers at the schools in violation of illegal software duplication had some intellectual property that was abused as frequently as software copyright restrictions … those individuals would be howling,” Bauer said.

“First, you practically need a staff attorney to help you understand copyright law and to have solid, practical policies that you can use,” he said. “Also, among some staff, students, and parents, there is the general belief that schools can do pretty much whatever they please when it comes to the use of copyrighted materials.”

At Overland Park, Moore said he spends a significant amount of time and energy educating stakeholders that schools are not exempted from copyright laws.

“Further, the reality is that we in education get steep discounts on software. I pay a whopping $48 for Windows 2000 and $65 for Office 2000 Premium,” said Moore. “Compared to prices for the consumer or private sector market, that’s awfully good.”

Bauer said he believes that Microsoft and the BSA are justified in taking action against schools, because educational discounts made it far easier for schools to afford enough copies of important computing software like the Windows suite.

“When you can get a fully loaded computer software bundleoperating system, connections to networks, applications suitefor less than $100 a system with the academic discounting, it is not fair to Microsoft to take further advantage of them by illegally copying the software,” he said. But educators agree that financial issues are not the most important factor in keeping schools compliant with anti-piracy laws. “There is a bigger issuethat of right and wrong. Stealing is wrong,” said Bauer. “‘Everybody does it’ or ‘we need it’ or ‘they are picking on our poor cash-starved operation’ are the kind of excuses that impenitent teenage shoplifters give when caught.”

Bauer said schools are not doing a good job in teaching an important lesson about honesty and integrity if they let students and faculty copy software illegally. “Our actions could drown out our words here, and students have the best hypocrisy detectors in the world.”

Agreed Ray Yeagley, superintendent of Rochester, N.H., Public Schools, “If we are going to tell our students that it is wrong to steal, we need to provide the example. You can be assured that they know when we are violating copyright laws.”

But what can a districtparticularly a large onedo to make sure it is not liable for copyright infringement?

According to Yeagley, Rochester has a stated policy about copyright violations and has voluntarily audited its own system to remove software that teachers have brought in on their own.

“Violation of the policy can result in denial of access to the computers until we have a satisfactory resolution that assures that the employee will not violate the law,” said Yeagley.

He added that his district also has provided employees with notice that if they knowingly violate the copyright laws, they may incur personal liability, because the district has provided them with adequate notice about policies and compliance. That notification is periodically renewed.

Bauer’s staff has implemented similar procedures at the Hill School.

“We manage all our licenses and insist that software cannot be installed without proof of licensing,” he said. Since the Hill School provides all students and faculty with notebook computers, Bauer’s staff also inspects all systems to make sure they are in license mode and do not order, install, or support systems without the full software bundle.

Said Bauer, “More than anything else, we talk to our students and faculty every year in our training programs, and we underscore what most of us already know in our heart of hearts’thou shalt not steal’ is still a pretty good standard.”